Room disservice

Hotels follow airlines with economizing moves

SAN FRANCISCO (CBS.MW) -- Taking a lesson from financially strapped airlines, U.S. hotels are cutting amenities and services in response to the worst occupancy rate in more than 30 years.

Stiff competition for customers and growing online-reservation discounts have led to leaner front-desk staffing and reduced restaurant and room-service hours. Guests can expect longer lines when checking in and out, fewer choices on restaurant menus and shorter hours for business center and exercise facilities, experts said.

The lodging industry, and cruise lines as well, are struggling with the same pressures befalling major U.S. airlines from continuing declines in both business and leisure travel.

"The hotel industry is taking a page from the airline industry's playbook: They are adopting a 'no waivers, no favors' policy," said Christopher Elliott, editor of TripRights.com, a consumer-advocacy travel site.

Several major airlines eliminated meal service last year on flights less than four hours -- which includes most one-stop transcontinental flights. They also increased fees on paper tickets and oversized or extra bags, and tightened refund and rebooking policies, among other cost-cutting measures.

About 60 percent of U.S. hotels in 2002 eliminated jobs or shifts for front-office managers and assistant managers in all departments, and cut back how often restaurants and other facilities are open, according to a report by PricewaterhouseCoopers.

Hotels are facing the lowest occupancy rate since 1971, and one of the lowest rates since the onset of the Great Depression. The rate fell to 59.2 percent last year from an already lean 63.6 percent in 2000, said Bjorn Hanson, leader of the hospitality practice for PricewaterhouseCoopers.

And fewer rooms that are occupied fetch top dollar. The average cost of a room declined by 1.6 percent last year, and by 1.2 percent in 2001, and major cities experienced far steeper declines, such as New York's 12 percent drop in 2002, Hanson said.

Late-night arrivals fare the worst

Many of the service cuts are targeted for off-hours so guests who arrive at peak times are less likely to feel the changes, Hanson said. For instance, room service may only be available until midnight, rather than 24 hours, and the business center might close at 10 p.m. rather than 11.

"The industry did a great job deciding how to reduce some of these services," Hanson said. "Guest satisfaction barely reflects it. (Guest satisfaction) declined, but only slightly."

But one night's stay may be enough to make any guest aware of other changes. For instance, fewer people on the reservations desk mean you'll have to go to the front desk for help.

"Now you may be routed to a regional reservation number or connected to the front desk -- it's not quite as efficient," Hanson said. "The reservationist has more training and access to yield management programs. Desk clerks might be very helpful but they're not the specialists."

Turn-down service -- in which the room is freshened up with new towels, the bed is turned down and chocolates are put on the pillows -- used to be the norm in many hotels, but is often only by request now.

Guests will see fewer doormen, be offered less valet parking, and laundry services and shoe shines may only be offered five days a week, compared to six or seven days before, Hanson said. And any packages or faxes you're expecting may no longer be delivered to your room.

While most of the changes are happening at higher-end hotels, even cheaper hotels are cutting where they can, including reducing the number of front-desk workers.

"There may have been one desk clerk plus a telephone operator, and now maybe only one employee is doing it all," Hanson said.

Housekeeping services have changed as well, said Elliott, the travel editor. "One thing I've seen a lot more very recently ... is not changing your linens and not changing your towels unless you request it."

Not just hotels

Hotels are not the only ones suffering from the slow economy and the travel slump. The airline industry's cost-cutting measures have been widely reported -- and they may not be over.

"We're going to see some airlines selling food and other airlines just not dealing with it at all," said Ed Perkins, a syndicated travel writer and consumer advocate.

It's not only a dearth of food, though.

"You can't even find magazines or reading materials on the planes anymore. There are fewer blankest and pillows," said David Stempler, president of the Air Travelers Association.

But these measures make sense in the current economic climate, Stempler said. "From a financial point of view, it would be unreasonable to not reduce costs."

Even cruise lines are making some changes. Some of the bigger cruise lines charge an extra $15 or $20 to eat in the deluxe dining room, Perkins said.

"They want to be able to keep the advertised prices low, so they split out as much as they can and charge for it separately," he said.

Some rental car companies have started charging customers who take advantage of the frequent-flier miles often offered with their rental cars.

The agencies "say rent from us and you get 500 miles and, by the way, we're charging you for it," Perkins said. The typical fee is $2 to $5, he said. "If you don't want the miles, you don't have to pay."

Keep that carpet

Hotels are cutting back on capital expenditures as well, so furniture and carpets may be used longer before being replaced. However, hotels have been over-spending in this area for years, Hanson said

"The hotel industry is in the best condition it's ever been in, so it can stand a year or two of less spending in that area," he said.

Costs are being cut "but guests aren't seeing it yet and won't notice it for a while."

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